Scottish rents outpace inflation since rent controls

Rent increases in Scotland have accelerated since the introduction of rent controls in September 2022, rising faster and higher than before the legislation.

That’s according to an analysis from DJ Alexander Ltd, Scotland’s largest letting agency, which reveals that between 2010 and 2022, one-bedroom flat rents rose by £138 (31.2%).

In the two years following rent control implementation, similar properties saw a £130 (22.4%) rise.

This, the firm says, translates to a 2.6% annual increase before controls, matching inflation, compared to a substantially higher rate afterward.

Rent cap legislation

The chief executive of DJ Alexander Scotland, David Alexander, said: “What the rent cap legislation did was put the brakes on property investment in the private rented sector (PRS), led to some landlords leaving the market, and has consequently increased demand to unprecedented levels which remain to this day.

“By interfering in the market and by imposing controls the law of unintended consequences has resulted in tenants being charged more, with increases rising at a faster rate, and with a market that is overheating with little sign of this being resolved.”

He added: “The logic of the findings of the latest data is that we need to scrap plans for rent controls and rent caps, the Scottish government must work with the PRS to grow the sector as a sustainable and valued element of the housing offering in Scotland to ease demand, and let the market find its own level again.

“The market has worked successfully for decades yet the last two year’s interference has led to unprecedented demand resulting in large increases in rents.”

Other properties saw similar rises

The research shows that two and three-bedroom properties experienced similar trends, with increases of 32.8% and 34.4% respectively over the 12-year period.

That was followed by 27.1% and 25.4% rises in the past two years, during a period of 10.9% inflation.

Data from 2010 to 2024 indicates that in most Scottish regions, rent rises remained below or near inflation levels.

Only Edinburgh and Glasgow saw significant increases, exceeding inflation by 54.4% and 31.8% respectively.

Mr Alexander said: “It is clear that intervention has done more to harm tenants’ pockets than anything else that could have happened.

“It is only by learning this lesson and reacting sensibly to it that the current levels of demand in the PRS will be calmed. Failure to do this will simply cause further rises in the future.”

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